U.S. car manufacturer Tesla has signed an agreement with Chinese partners to develop a grid-side energy storage station in Shanghai. The project will utilize Tesla's Megapack energy storage batteries and marks the company's first grid-connected energy storage facility in mainland China.

The agreement was finalized on Friday and involves a total investment of 4 billion yuan (approximately 556 million U.S. dollars). The energy storage station will be located in the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone. Partners in the project include Tesla, the administrative committee of the Lin-gang Special Area, the Shanghai Fengxian District government, and China Kangfu International Leasing Co., Ltd.

This development signifies Tesla’s continued expansion in China’s rapidly growing energy storage sector and supports the integration of clean energy solutions into the world’s largest power grid. The project aims to enhance grid performance by using energy storage to support electricity spot trading and balance power demand during peak and off-peak hours.

Dong Kun, general manager of Tesla China's energy business, stated: “The station, once launched, will participate in electricity spot trading, helping balance peak and off-peak power demand in the local grids and enhance grid stability.”

In addition to the Shanghai project, Tesla plans to expand its cooperation with China Kangfu to introduce zero-carbon energy solutions to a broader global market. This aligns with Tesla's overall strategy to strengthen its position in the global renewable energy and energy storage industries.

Earlier this year, in February, Tesla’s Megafactory in the Lin-gang Special Area began producing Megapack batteries. This factory is Tesla’s second facility in Shanghai, following its Gigafactory which manufactures electric vehicles. The Megafactory is dedicated to the production of energy storage products, contributing to Tesla’s global energy goals.

Looking ahead, Tesla expects a 50% year-on-year increase in energy storage deployments in 2025, highlighting strong growth momentum in this segment.

This latest investment reflects Tesla’s long-term commitment to China’s energy sector and supports broader efforts to improve power system flexibility, integrate renewable energy, and promote sustainable development. With the Lin-gang Special Area serving as a strategic base, Tesla's energy initiatives in China are positioned for continued expansion, offering opportunities for advanced energy applications and further collaboration.

by en.people.cn